NIFTY WEIGHTAGE CHANGE..1996 TO 2013

Nifty’s changing face

BHAVANA ACHARYA

The might of the services industry has grown over the years, with the entry of sectors such as software and telecom.Remember Nagarjuna Fertiliser & Chemicals? The fertiliser stock was at one time a market-moving bellwether, forming a part of the Nifty index at the time of its inception. Fellow index-mates then were yesteryear favourites such as MRPL, Chambal Fertilisers, Madras Refineries (now CPCL), IPCL, Kochi Refineries, IFCI and GE Shipping.The Nifty index was launched in April 1996, with its base date set to November 5, 1995. Since then, the index has delivered an annual return of 9.6 per cent.Those staying putThe year 1996 was also among the years that saw more active churning in Nifty components, with six stocks being replaced. The then Hero Honda Motors, Apollo Tyres, and the two fertiliser companies were some stocks that bowed out in the Nifty’s first re-jig. Instead ABB, East India Hotels and M&M found their way into the index; 1998, 2002, and 2007 were other years of more index replacements.In all this mixing up of the Nifty through time, 13 stocks have never been replaced at any point. One is, of course, Reliance Industries, despite its sporadic mergers and acquisitions. Its weight in the index now at 7 per cent (free-float market cap) is little changed from the 6.6 per cent (full float) in April 1996.The other stalwart is SBI, which in fact had the heaviest index weight of 8.3 per cent (full float) in 1996. Others are Hindustan Unilever and ITC. The not-so-obvious ones which stayed put are Hindalco Industries, Ranbaxy Labs, ACC and Ambuja Cements. Three Tata stocks — Tata Steel, Tata Power, and Tata Motors — have also always been a part of the Nifty.In 1996, consumer-themed stocks — auto, hotels and FMCG — held a weight of 24 per cent in the index. Now, it’s 22 per cent. But exclude champion ITC and the consumer stocks’ collective weight drops to just 11 per cent. bowing to serviceThe might of the services industry has grown over the years, with the entry of sectors such as software and telecom. Banking, finance, telecom and software together account for 42 per cent of the Nifty weight now. In contrast, services held just about 27 per cent at inception.The rising influence of the service sector has come at the cost of manufacturing. Sectors such as fertilisers, steel, metals, textiles, and tyres have either seen their weights drop, or completely disappear over the years.With both Indian Rayon and Arvind Mills booted out in 1999, Grasim is the textile industry’s only index representative now. Indian Aluminium Co exiting in 1996, Essar Steel and Indo Gulf Corp following it in the next two years drastically reduced the weight of the steel and metals sectors.(This article was published on December 14, 2013)http://www.thehindubusinessline.com/features/investment-world/niftys-changing-face/article5460110.ece

INDIA GROWTH STORY REBOUNDS..!!!

Bad times aren’t forever

As more good news trickles in, investments in India will regain vigour.
The last few quarters have been challenging for India — with GDP growth declining sequentially, worsening foreign trade triggering a sharp depreciation in the currency, and inflation, interest rates and budget deficits well above comfort levels. However, there is ample reason to believe that India’s woes are coming to an end. This conviction stems from the exemplary resilience shown by the economy in the face of past adversities, a closer analysis of its economic cycles, and visible signs of a reversal in recent trends.
Basic resilience
There is some amount of anticipation, even anxiety, in the investor community over the outcome of the upcoming general election in India and the impact of global events, such as the tapering of quantitative easing by the Fed.
However, while the effects of adverse events — political or otherwise — impact on India’s prospects in the short term, both the Indian economy and its capital markets tend to tide over these in the medium term.
On the political front, India experienced its most volatile political period in recent history from 1996 to 2000 when it saw five governments at the Centre under three different prime ministers and a war with Pakistan. Yet, GDP growth over the period (March 1996 to March 2000) averaged 6.7 per cent and the Sensex gained by nearly 50 per cent.
Two key events in late 2008 precipitated the slowdown in India: the Lehman collapse followed by the terrorist attack on Mumbai within three months. India’s GDP growth fell to 5-6 per cent in the next few quarters and the Sensex crashed to below 10,000. But the nation emerged stronger from the crisis, marked by a return to the high-growth trajectory of 8 per cent plus and a doubling of the Sensex by late 2009.
Economic Resurgence
The last three economic cycles before the current one lasted for 5-6 years (between lows): 1993 to 1998, 1998 to 2003 and 2003 to 2009.
The lows are characterised by a bottoming-out of almost all macroeconomic indicators — economic growth hits a trough and foreign trade, government finances and interest rates are stretched.
The resurgence of the economy post the cyclical lows is usually fast and steep, with an even quicker appreciation in the capital markets and valuations. In mid-2003, GDP growth had fallen to a multi-year low of around 4 per cent, while fiscal deficit and inflation had ballooned to 6 per cent each. The stock markets had pared gains from the IT boom and foreign investment had slowed, reflected in a weakening currency.
Subsequent quarters started showing signs of rapid recovery and growth picked up to over 8 per cent in less than a year, foreign investments surged and the rupee recovered almost 10 per cent — all these while inflation held steady. The stock markets almost doubled by the end of 2003, and the Sensex galloped to treble by early 2006.
The story was no different in 2009 when the past year had seen the global financial crisis unfolding. Growth had moderated to levels of 5-6 per cent, interest rates and inflation were in high single digits and budget deficit was expanding. Consequently, capital markets had crashed to half their boomtime highs. Just like the previous cycle, the economy recovered rapidly. Beginning 2010, India clocked consistent GDP growth of 8-9 per cent for five to six quarters, buoyed by a moderation in inflation, interest rates and budget deficit.
Towards the end of 2010, stock markets had doubled from the 2009 lows, adding a trillion dollars in market capitalisation. The rupee had also strengthened by 10 per cent.
It has been four years since the last cyclical low hit India in 2009, and as on previous occasions, most economic parameters are at multi-year lows. The worst seems to be behind us, and the cycle is poised for a turnaround.
Welcome signs
Some signs of an uptick are already evident. In the July-September 2013 quarter, exports grew over 10 per cent compared with the corresponding period last year even as imports registered a decline on the back of moderating gold and oil imports. Consequently, current account deficit for July-September plunged sharply to a little over $5, a fourth of the level seen in the same period last year.
The Government expects to contain CAD at 3 per cent of GDP in the fiscal ending March 2014, which is almost 40 per cent lower than in March 2013. Together with continuing robust capital inflows, this should lend crucial support to the rupee in the medium term.
Therefore, political and other events have failed to make a lasting dent in the Indian economy in the past, and capital markets surge much faster than the improvement in headline macroeconomic indicators.
As more good news trickles in over the quarters, investments in India, including private equity, will regain vigour. Greater predictability, particularly towards the second half of 2014, will induce fence-sitters to pay premium valuations to close deals. The right time to invest is now when valuations have still not run up much, and not later in 2014 when indications of an economic turnaround emerge.
A spurt in the markets and valuations over the course of next year will also set in motion a flurry of PE exits, including PE-backed IPOs. Again, PEs would do well to start preparing portfolio companies for an exit now, so as to make the most of the opportunity when the tide turns.
(The authors are co-founders, Sage Capital.)
(This article was published on December 21, 2013)

http://www.thehindubusinessline.com/features/investment-world/macro-view/bad-times-arent-forever/article5487127.ece

Time Value of Money & FUTURE ...!!!

De-jargoned: Time value of money
The real value of money essentially has to consider the impact of inflation on the purchasing power
Lisa Pallavi Barbora

If somebody gave you a choice to receive Rs.50,000 now or after three years, what would you choose? This one is simple, you will choose to receive the money now. Intuitively, you know you can do a lot more with the money today and you can even invest it so that three years later, it is worth more. Now if somebody gives you a choice, would you prefer Rs.50,000 today orRs.60,000 after three years? This is a harder choice to make and you need to calculate the time value of money to decide. There are two important thing you need to consider for that—the interest you can earn on your money and the rate of inflation or the change in purchasing power of your money.
Future Value of moneyThe future value of money can be calculated to tell you how much your money will be worth after a defined period of time. Let’s say you leave the Rs.50,000 you have received today in your savings bank account. Then after three years, it will be worth Rs.56,341 assuming that the interest offered on the savings account is 4% and the interest due is compounded quarterly.

The formula for calculation is: amount*(1+(interest rate))^number of periods. So, in this case it can be calculated as 50,000*(1+(.04/4))^12.

Alternatively, if you had instead invested in a three-year fixed deposit, with annual compounding your return would amount to Rs.64,751 assuming a 9% per annum rate.
Now that you know the future value of your money, you can say with confidence that you would prefer to have Rs.50,000 today. But remember that this is the nominal value of money.
Nominal vs real value of moneyThe real value of money essentially has to consider the impact of inflation on the purchasing power. Inflation measures the rise in cost of goods and services. In other words, every year things you buy become more expensive by a certain margin and this margin is measured by inflation. At present the Consumer Price Index (CPI), or what’s referred to as the retail inflation, is around 11%. This means the total value of your basket of goods has increased 11% in the last year and your money is worth that much less. If you consider that in the last year or so the CPI has been around 9-10% and extrapolate 9% (per annum) as the average for the next three years, the value of your nominal Rs.64,751 sum is still only Rs.50,000. This happens because at an average inflation rate of 9%, each year your money is worth that much less. You have to discount the value of your money by the inflation figure to ascertain the real value.

The calculation is simple: amount/(1+discount rate)^number of periods. In this case the discount rate is the inflation.

Understanding the difference between real and nominal value will help you make a better choice for investing money today and enhancing the effectiveness of the future value of your money. Lastly, you have to consider things such as taxation on earnings to know the final money in hand.
http://www.livemint.com/Money/Xol3HKN4bGm0DixwI8CJRL/Dejargoned-Time-value-of-money.html

Nifty target at 6,481--Barclays..!!!

Barclays sets Nifty target at 6,481 for end-2014

PTINEW DELHI, DEC 24:Indian equities may have a roller coaster ride next year given the fluctuating sentiment and modest fundamentals, Barclays said, setting a target of 6,481 for the Nifty for end-2014.Despite the possibility of the economy bottoming out, the investment cycle could remain weak for another couple of years and earnings downgrade should continue.“We maintain our defensive stance in this environment, expecting only modest equity returns from the current levels,” Barclays said in a research note.According to the global brokerage major, the sharp performance of Indian equities since the beginning of September 2013 clearly indicates that the market has shrugged off the taper fears and now appears much more optimistic on a stable and strong political outcome from 2014 elections.The National Stock Exchange’s 50-stock index Nifty has surged over 733 points since September this year. On September 2, 2013 Nifty was at 5,550.75 points and it increased to 6,284.50 as on December 23, 2013.Corporate fundamentalsHowever, corporate fundamentals continue to remain weak with earnings growth of the BSE-100 being propped up significantly by the rupee’s depreciation.“We remain defensive and set a Nifty target of 6,481 for end-2014,” the research note added.The negative trigger for the market include — a weak mandate post the 2014 elections; NPA risk for banks and INR depreciation.On the positive side, the key factors are — expectations of a strong turnaround in GDP growth, a win by BJP in the parliamentary elections and an improvement in capital spending.According to Barclays, the key overweight sectors are IT services, healthcare, energy and consumer discretionary and the key underweight sectors are financials, industrials and materials.(This article was published on December 24, 2013)

http://www.thehindubusinessline.com/markets/barclays-sets-nifty-target-at-6481-for-end2014/article5497448.ece

BULLs in CONTROL..BUT...!!!

The latest news on GAS PRICE hike has triggered a new wave of Stock rerating of RIL, ONGC and Cairn. The markets strength will come from these sectors. The current up move is a decent show by the BULLS to keep the BEARs at bay. The Rajan effect has given booster dose to FII investments. The FII invested close to 1.1 Lakh crore in 2013, they have recorded highest ever investment in 2010 as per reports. The real challenge lies in keeping their faith in Indian growth story & markets. As of now experts are favouring the BULLs and markets may touch new highs. Nifty shall not trade below 6130 level. The momentum needs to be sustained at least till the DEC13 expiry, for further consolidation. So long as Nifty stays above 6220 the markets are likely to make new high of 6435 then to 6550 level. 

The banking sector is differently working and looking for South ward. Bank Nifty has to trade above 11550 level for it to perform in future. The ICICI has to trade above 1130, Axis above 1309, SBI above 1781 and HDFC bank above 689 levels. 

The court order infavour of the lenders and against Vijay Mallya, the knee jerk reaction may impact United Spirits, so negative impact on the stock tomorrow likely to force the stock to seek lower level supports at 2530 level or 2380 is not ruled out. This can give good opportunity for Diagio to go for creeping acquisition. Similar, but not that much serious is on the INFY. The high profile Bala exit may have negative impact. The EXIT door is wide open to as many as 9 seniors, opted for greener pastures out-side. 

The other scenario which is favouring BEARs when the NIFTY trades below 6130 level, is that the recent RUNUP is “ENOUGH is ENOUGH”. The US QE Tapering in the coming months may accelerate, more pain stored in for emerging markets like INDIA.The political equations definitely not favouring CONGRESS and the BJP case is no different. So lot of confusion may arise after two months and the BEST case to SELL is NOW. So build now to cover later. The CAVEAT in this scenario is that the GOVT. may do all that is need to prop the markets high, the RBI may slash CRR and Repo rates to boost the economy and a renewed investment EUPHORIA in the markets may trap the BEARS. 

The MidCap rise is stronger than the fall shows that the markets are in BULL grip. Those who has the holding capacity of one year and two time averaging CAPITAL, then shall try to buy at the current levels, other wise go for “Stop-loss Based Momentum Trades”. 

I have suggested to BUY Wipro, Auro Pharma and Escorts which made decent run in the recent times, exit 50% at current prices.

INFY, RELIANCE,SBI, TATA STEEL SUPPORTS & TARGETS....!!

Pivotals: Reliance Industries (Rs 893.6)
YOGANAND D.December 21, 2013: 
The stock was volatile in the previous week, though it rebounded after testing the lower boundary of the sideways range at Rs 840. It surged 4.5 per cent on Friday, turning its earlier loss into a gain of 3.5 per cent. With this rally, the stock has slightly breached the upper boundary at Rs 885 and short-term outlook appears positively biased. There has been an increase in daily volumes in the past three trading sessions. Moreover, indicators in the daily chart have entered the bullish zone implying upward momentum. The daily moving average convergence divergence indicator has signalled a buy. The stock has leapfrogged over its 21- and 50-day moving averages indicating bullish momentum. Short-term traders can consider going long with a stop-loss at Rs 880. Targets are Rs 910 and then Rs 930.
The stock extended its medium-term sideways consolidation in the wide band between Rs 770 and Rs 930. Strong rally above Rs 930 will pave the way for a rally to Rs 955 in the medium-term. Key supports to watch for next week are pegged at Rs 860, Rs 840 and Rs 820.
State Bank of India (Rs 1,751.8)
This stock was also choppy last week and finished on a marginally positive note. However, its short-term trend remains indecisive. It is likely to move sideways in the range between Rs 1,675 and Rs 1,920 in the ensuing weeks. Short-term trend will be decided only if the stock moves out of this phase. Hence, traders should tread with caution as long as the stock is in this zone. Significant immediate resistance is at Rs 1,810. A rally above this level can test the upper boundary at Rs 1,920 in the near-term. Resistance beyond this level is placed at Rs 2,015 and Rs 2,065.
On the other hand, a strong tumble below Rs 1,675 can drag the stock down to Rs 1,600 in the near-term. Next important support is at Rs 1,500.
Infosys (Rs 3,552.3)
Infosys was in the limelight as it moved out of the sideways band and has jumped 5.3 per cent, with good volume, for the week. It is nearing the key resistance at Rs 3,600 mentioned in this column last week. But the indicators in the daily chart are about to reach the overbought levels signalling minor correction is on the cards. Therefore, inability to rally above Rs 3,600 will be the cue for short-term traders to take profits off the table at that juncture. An emphatic rally above Rs 3,600 can take the stock northwards to Rs 3,750 and then to Rs 4,000 in the medium-term. Investors with medium-term perspective can remain invested with a stop-loss at Rs 3,000 levels.
On the other hand, a decisive fall below the immediate support at Rs 3,450 can drag the stock down to Rs 3,350 and then to Rs 3,250. Subsequent important supports below these levels are at Rs 3,150 and Rs 3,000.
Tata Steel (Rs 417.8)
The volatile movement continued in the stock and it marginally advanced in the previous week. As long as the stock trades above Rs 370 its short-term trend stays bullish. Only a strong move above the immediate resistance at Rs 423 will reinforce strength and accelerate the stock higher to Rs 440 and Rs 450 band. In that scenario, short-term traders can initiate long positions with Rs 423 as a stop-loss. Immediate supports are at Rs 410 and Rs 400. But a decisive fall below Rs 400 can pull the stock down to Rs 386.
Medium-term trend for the stock has been up since its August low of Rs 195. Investors can prolong their long holding with a stop-loss at Rs 320.
(This article was published on December 21, 2013)

http://www.thehindubusinessline.com/features/investment-world/market-watch/pivotals-reliance-industries-rs-8936/article5487244.ece

NMDC, Sesa Sterlite....MORE PROFITS.....

Higher mining profits for NMDC, Sesa Sterlite
Companies are expected to gain from the rebound in international iron ore prices as well as expansion in volumes
Ujjval Jauhari  |  Mumbai  

December 18, 2013 Last Updated at 22:48 IST

Iron ore prices, after seeing a low of $111 a tonne in June, have rebounded to $135 a tonne. While the start of 2013 was on a bullish note, with prices at $158-160 a tonne, the decline thereafter on the back of weak economic cues has led average prices to stay at $135 a tonne during the first 10 months of 2013.
Analysts estimate the prices will stay at current levels, which bodes well for mining companies such as NMDC and Sesa Sterlite. NMDC is also seeing volume expansion, boosting its prospects. Analyst Giriraj Daga at Nirmal Bang says “the fact that NMDC will see double-digit volume growth in FY14 makes us positive on the stock”. For Sesa Sterlite, while the company faces a mining ban in Karnataka and Goa, the resumption of mining in Karnataka will be positive. A weak rupee should also provide support to domestic realisations of both.
On NMDC, of nine analysts polled by Bloomberg in December, seven have a ‘Buy’ and two a ‘Neutral’ rating. Their consensus target price of Rs 156 for the stock, trading at Rs 139 levels, indicates an upside of about 11 per cent. For Sesa, of eight analysts polled in December, four have a ‘Buy’ and one a ‘Hold’ (remaining three ‘Sell) rating, with a consensus target price of Rs 206. However, brokerages HSBC and JPMorgan, which are more optimistic and are looking at other triggers, have a target price of Rs 240 for the stock, currently trading at Rs 201.
NMDCWith international iron ore prices rebounding, NMDC took small price rises of Rs 100 a tonne in October. It maintained prices for November but once the increases were well absorbed, it raises prices again, of fines and lumps by Rs 200 a tonne in December. The lower ore production in Karnataka and higher demand gave NMDC the confidence to do so. Positively, iron ore miners in Odisha had also raised prices after liquidation of excess inventory.
Analysts at ICICI Securities say NMDC’s average realisation of fines in Karnataka e-auctions also rose to Rs 3,258 a tonne in November from Rs 2,518 a tonne in October. Further, the latest auctions in December by Odisha Mining Corporation (OMC) fetched Rs 200-500 a tonne in premium, which should also reflect positively for NMDC. Thus, while higher prices are a positive, the increase in volumes is likely to further boost profitability.
During November, the sales volumes at 2.44 million tonnes remained robust. The cumulative volume for October and November was 4.7 mt. Thus, for the quarter ending December, analysts expect NMDC to put up a strong show in volumes.
Analysts at ICICI Securities observe the company will beat their volume estimate of 6.8 mt for the December quarter. While ICICI Securities expects the company to achieve 28 mt during FY14 (higher than the 26 mt in FY13), some others like Daga expect 30 mt, in line with the company’s earlier forecast. For FY15, the production forecast (by the firm) is 32 mt.
Sesa SterliteThe company’s iron ore operations have remained suspended for a while, due to a mining ban by the Supreme Court. However, with the ban being lifted, it is likely to start mining in Karnataka, where it has six mt of capacity. Analysts expect production by end-FY14 to reach one to two mt at Sesa’s mines in the state. For Goa, the operations (around 16 mt capapcity) are expected to take more time to start. While the management hopes to clock an Ebitda (operating earnings) per tonne of $35-40 after the start of ore production in Karnataka, which will be positive for overall operating profits for the merged (Sesa Sterlite) entity, the gains could be higher if full capacity becomes operational.
Given the total capacity of 22 mt and assuming realisation of $135 a tonne, the annual revenue would work out to Rs 18,000-19,000 crore. Although this would account for 20 per cent of its annualised consolidated revenue in the September quarter (when ore business contribution was nil), given the past, record wherein Sesa has reported Ebitda margins of over 50 per cent, the contribution to profits will be much higher.
Analysts at CLSA say Sesa’s iron ore business should improve sharply over FY15-16 once the Goa ban gets lifted. They expect the ban to be lifted in FY15 itself but with a ceiling being imposed on Goa ore production. In other segments such as non-ferrous (copper, aluminium, zinc, lead and silver) and crude oil, the performance is equally important. CLSA has upgraded standalone Ebitda of the company by 13 per cent and 18 per cent for FY15 and FY16, led by higher iron ore price estimates, a 31 per cent rise in 2014 copper treatment and refining charges, and lower costs for parent Vedanta Aluminium.

http://www.business-standard.com/article/markets/higher-mining-profits-for-nmdc-sesa-sterlite-113121800760_1.html

Infosys on hiring spree .............

Narayana Murthy shocks with 'Mera Bharat Mahaan' quote, indicates Infosys Ltd on hiring spree, 16k jobs on offer
Press Trust of India | Updated: Dec 18 2013, 19:38 IST
SUMMARYNarayana Murthy signals aggressive move after taking over reigns at Infosys Ltd again.India's second largest software services firm Infosys Ltd will hire up to 16,000 engineers next year, the company's Chairman N R Naryana Murthy said today.
"We have already started the hiring process for next year. We will be hiring around 15,000-16,000 engineers for next year and are already in process," Naryana Murthy said at an event here.
With improving demand for outsourcing services in the US and European markets, which account for over 80 per cent of the revenues of the USD 108 billion Indian IT sector, hiring is expected to be better than the last few years.
Speaking on a range of issues, Narayana Murthy said that people in the country needs to take more definitive steps towards development.
"India is a country of empty words, not action. Only repeating, 'Mera Bharat Mahaan' won't help. Learn to finish the race first in order to finish first," Murthy reiterated.
He encouraged students to be open to new ideas and not be cynical. "Move from apathy to action. Aim at becoming better than me. Luck will favour those who are prepared."
Talking about the economic environment in the country, he said it is going to change going forward.
"As long as they (government) make businesses grow in the country, as long as we collect more taxes, as long as we use those taxes efficiently, I think the confidence will come back, every one will be very happy with whatever government is in the Centre and we will be better country," he said.
Murthy called upon educational authorities to concentrate on providing quality education. "Students are the future of this country. Quality software engineers will carve the way ahead for becoming a software global giant," he said.
On developing managerial skills, Narayana Murthy said it requires learning to understand other cultures, assimilating good values and being courteous.

http://www.financialexpress.com/news/narayana-murthy-shocks-with-mera-bharat-mahaan-quote-indicates-infosys-ltd-on-hiring-spree-16k-jobs-on-offer/1209201

FIIs invested 1 LAKH CRORES...!!!

Deepak Korgaonkar  |  Mumbai  

December 6, 2013 Last Updated at 23:29 IST, 

FII inflows cross Rs 1-lakh-cr mark

According to the Securities and Exchange Board of India, FIIs invested Rs 100,577 crore ($18.07 billion) as of Thursday. On Friday, they invested an additional Rs 864 crore (provisional data). Of the total net inflow, about Rs 40,000 crore came in the last three months, following measures taken by the Reserve Bank of India (RBI) to boost the weakening rupee and revive economic growth. A delay in US Federal Reserve’s quantitative easing tapering, coupled with better-than-expected September quarter earnings, ensured FIIs kept foreign money flowing into Indian equities.

Since their entry into Indian capital markets in 1992-93, net FIIs inflows have exceeded Rs 1,00,000 crore in 2010 and 2012. In 2012, FIIs had net invested Rs 1,28,360 crore ($24.4 billion), while in 2010, they made a record net inflow (in rupee terms) of Rs 1,33,266 crore ($29.36 billion).

Currently, market capitalisation is heavily skewed in favour of large companies. But analysts say there is ample potential for companies with strong fundamentals and sound business models in the mid-cap space. Latest data on shareholding pattern show FII holdings in BSE100 companies is estimated at 15.5 per cent. These companies account for about 70 per cent of the total BSE market capitalisation. FIIs hold an average 11 per cent stake in BSE mid-cap companies, and eight per cent in small-cap companies. Analysts expect the fund flow to continue. Kruti Shah, an analyst with Karvy Institutional Research, says, “In the third quarter of 2013-14, we can expect net positive FII inflows due to postponement of the US Fed’s tapering decision. With rising dependence on short-term inflows to finance CAD (current account deficit), we expect volatility in foreign exchange reserves to remain high.” Since September, FII made net inflow of Rs 40,000 cr in Indian equity markets Foreign institutional investors (FIIs) continue to pump in money into Indian equity markets, with their net inflow so far this year crossing the Rs 1-lakh-crore mark on Friday. According to official data, the inflows touched a whooping Rs 1,01,441 crore as of Friday.

http://www.business-standard.com/article/markets/fii-inflows-cross-rs-1-lakh-cr-mark-113120600450_1.html

Nifty target at 6,900 - UBS....!!!

Reuters  

December 5, 2013 Last Updated at 09:21 IST

UBS sets Nifty target at 6,900 for 2014

Says tapering is not a big fundamental worry for IndiaUBS set Nifty 2014 target at 6,900 and said it expects the index to trade between 5,500 and 6,900 for the year based on its valuations and FY15 earnings growth estimates of 10-15% for the NSE index.The investment bank adds tapering is not a big fundamental worry for India, but a depreciating rupee may yet be a likely trend. More than 30% of Nifty earnings benefit from the depreciating rupee and this could provide some stability for overall market earnings.UBS added that elections are the key theme for first half of 2014 and the recent rally implies that a Narendra Modi-led BJP government is no longer viewed as a low-probability scenario. The BJP emerged as the biggest winner in four key state elections, exit polls forecast on Wednesday, a possible blow to the ruling Congress party ahead of a general election due next year.The bank is "overweight" on Indian IT, telecommunications, media, oil and gas, private banks and power shares, while being "underweight" on two-wheelers, consumer discretionary, infrastructure and capital goods, government banks.UBS remains "neutral" on Indian four-wheelers, rural-focused consumer staples, metals, mining and pharmaceutical stocks.http://www.business-standard.com/article/markets/ubs-sets-nifty-target-at-6-900-for-2014-113120500108_1.html

MSP Steel & Power ... !!!!!!

Home > Money > ReportMSP Steel reworks project in quest of profitsThursday, Dec 5, 2013, 9:08 IST | Place: Kolkata | Agency: DNASumit Moitra  Looks to introduce high-margin items and cut down on costly fuels at Jharsuguda project in Odisha.Steel makers are thinking out of the box to get the better of the gloom. MSP Steel & Power has restructured and tweaked the integrated steel project promoted by its arm, MSP Metallics, deciding not to opt for low-profit products and reduce dependence on high-cost fuels like coal. Instead, it wants to incorporate high-margin items at a lower capital cost at its project at Jharsuguda in Odisha.“The reorganisation of the project by going for high-value items like seamless pipes and cutting down on unprofitable items like sponge iron has brought down capital costs and would also help its bankability,” Kamal Jain, chief financial officer, MSP Steel, told dna.MSP Metallics is scaling down the size of the sponge iron plant to 0.57 mtpa from the projected 0.99 million tonnes per year (mtpa), in addition to cutting down the sizes of coke oven, coal washery and captive power plants. At the same time, the company is doubling the capacity of the iron ore pellet plant to 1.2 mtpa from the earlier planned 0.6 mtpa and that of  iron ore sinter plant to 0.92 mtpa from 0.46 mtpa.Also, additional facilities like a seamless tube plant of 0.3 mtpa and TMT bar plant of 0.24 mtpa are in the works. “The promoter of the project, due to scarce availability and rising of price of iron ore and coal, compelled to shift its focus to producing value-added special category steel products such as seamless tube and steel rods. As a strategic measure, capacities of sponge iron are reduced substantially, along with the coal washery, coke oven and captive power plant. In order to match the capacity of metallics, enhancement of pellet and sinter capacity is envisaged,” the project document stated.The total cost of the proposed restructured project is estimated at Rs 1,279 crorehttp://www.dnaindia.com/money/report-msp-steel-reworks-project-in-quest-of-profits-1929809

CAIRN INDIA STRIKES...KG BASIN BOUNTIFUL OIL RESERVES..!!!

Cairn strikes east coast oil bounty, 10,000 bpd output likely from 2017
Pranav Nambiar | New Delhi | Updated: Dec 03 2013, 05:29 ISSUMMARYCAIRN India has struck significant oil reserves in its Krishna-Godavari (KG) Basin onshore field KG-ONN-2003/1 with productionCAIRN India has struck significant oil reserves in its Krishna-Godavari (KG) Basin onshore field KG-ONN-2003/1 with production estimated at 8,000-10,000 barrels of oil per day (bopd) starting 2017. This opens up a larger play for Cairn India on the east coast, joining the likes of Reliance Industries (RIL) and Oil and Natural Gas Corporation (ONGC) that have made large finds in the region.As per the declaration of commerciality (DoC) documents submitted by Cairn to the Directorate General of Hydrocarbons (DGH) on November 29, the company has in-place oil resources of about 320 million barrels, of which about 40 million barrels can be recovered. It has also found small amounts of gas with recoverable reserves of around 70 billion cubic feet (bcf) of gas.
The oil resource estimate is based on the appraisal of three discovered wells in the field — Nagayalanka SE, 1Z and 1Z ST. Cairn will invest around $600 million in drilling 20 wells of the next three to four years and an additional $165 million for creating the infrastructure to produce oil from the field. Oil ministry sources say Cairn India’s reserves in the field can be revised upwards as it drills more wells. The net present value (NPV) of the project stands at around $ 900 million.Cairn’s KG onshore field has a tight reservoir with low permeability, thus requiring the company to use hydraulic fracking techniques to drill the wells. The recovery factor of the KG field is therefore just 10-15%, while at Ravva, it is as high as 60%.
The sedimentary formations where Cairn’s KG field is located in are also called Mesozoic rocks and these formations formed over 100 million years back have seldom been tapped in India, though they account for nearly 50% of global hydrocarbon finds. Mesozoics are mainly found in the western regions of Narmada, Cambay and Saurashtra, in the east around Cauvery and the KG Basin as well as the north along the higher Himalaya.According to industry experts, as the investments are lower in the case of onshore fields, the threshold for commerciality is lower and from that perspective, 8,000-10,000
bopd is a reasonably good find. In contrast, a deepwater field which requires platforms for separating oil and water as well as pipelines for evacuating oil is generally commercial at higher levels of around 30,000 bopd. ONGC’s recent oil find of about 100 million tonnes or 700 million barrels of oil in its east coast KG-DWN-98/2 field is larger than the Cairn find but this is located in the deepwater region. “In the case of onshore fields, we need just tankers to evacuate the oil. So, even small onshore oil finds are typically commercially viable,” said a public sector oil company official. The latest find also opens up a huge play for the company in the east coast. Cairn India will soon begin exploring its offshore KG basin block KG-OSN-2009/3 after it received a government nod to undertake a pared down minimum work programme in the block. The private sector oil and gas company will invest Rs 500 crore to undertake the MWP and subsequently ramp up investments depending on the prospectivity of the block.
Cairn is also undertaking 4D seismic work to identify pockets of oil deposits which have bypassed east coast Ravva fields. The oil production from Ravva is seeing a natural decline averaged 22,600 barrels of oil equivalent per day (boepd) in the July-September quarter. The results from the 4D tests are expected to be released by the end of the financial year.Cairn’s current production is 1,78,000 boepd and expects to exit FY14e at greater than 2,00,000 boepd, led by Rajasthan which produced around 1,74,200 boepd in the previous quarter.

http://www.financialexpress.com/news/cairn-strikes-east-coast-oil-bounty-10000-bpd-output-likely-from-2017/1202402/2

INDIA Q2 economic growth GOOD...

Q2 economic growth at 4.8% signals recovery

K. R. SRIVATS

Farm output, power boost performance; mining, manufacturing still lag

Farm output, power boost performance; mining, manufacturing still lag
NEW DELHI, NOV. 29:  
Sending the first signs of a recovery, the economy grew at a higher-than-expected 4.8 per cent in the second quarter, mainly on the back of a robust 4.6 per cent increase in farm output and a good showing by the electricity (7.7 per cent), construction (4.3 per cent) and financial services (10 per cent) sectors.
The agriculture sector had recorded modest 1.7 per cent growth in the same quarter of the last fiscal year. However, a poor showing by the manufacturing and mining sectors kept the GDP growth under 5 per cent for the fourth straight quarter. Manufacturing grew just 1 per cent, while mining output shrank 0.4 per cent, according to official data released on Friday. The latest GDP growth is higher than the 4.4 per cent rise recorded in the first quarter this fiscal, but much lower than the 5.2 per cent recorded in July-September last fiscal. For the six-months ended September 30, the economy grew 4.6 per cent, lower than 5.3 per cent growth in same period last fiscal.
The economy has been hit hard by dipping demand, indicated by low private final consumption expenditure, which grew 2.16 per cent this quarter against 2.54 per cent in the corresponding previous period. High interest rates are blamed for the low demand.With persistent inflation, the RBI has not been able to lower key rates. This may, it is feared, stay its hand yet again on December 18 despite the continuing sluggishness in the economy.Economic Affairs Secretary Arvind Mayaram expressed happiness over the second-quarter performance. “There were many people who were predicting that growth will be less (than in the first quarter). I believe in the third and fourth quarters you will see a pick up,” said Mayaram. He expects overall economic growth in the current fiscal to be 5 per cent-plus.
Planning Commission Deputy Chairman Montek Singh Ahluwalia also expressed confidence that growth would pick up in the second half. The economy is now in much better shape, he noted.
But India Inc is worried. Chandrajit Banerjee, Director-General, Confederation of Indian Industry, said GDP growth of below 5 per cent for the fourth consecutive quarter is worrisome. Assocham President Rana Kapoor called for immediate steps to boost the manufacturing and mining sectors.
srivats.kr@thehindu.co.in
(This article was published on November 29, 2013)

http://www.thehindubusinessline.com/economy/q2-economic-growth-at-48-signals-recovery/article5405161.ece?homepage=true

Rs 20,000 crore National Optical Fibre Network project...!!! HUGE OPPORTUNITY!!!!

Just 60 gram panchayats covered under broadband project so far
By PTI | 28 Nov, 2013, 04.19PM IST
NEW DELHI: The government has provided broadband connectivity to only 60 gram panchayats till now under the Rs 20,000 crore NOFN project, which has to cover 2.5 lakh panchayats by September 2015. "It is only 60 gram panchayats out of 2.5 lakh gram panchayats, the percentage is minuscule," Universal Service Obligation Fund (USOF) Administrator N Ravi Shankar said when asked as to how many panchayats have been provided with broadband connectivity .. Read more at:
http://economictimes.indiatimes.com/articleshow/26528512.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

GREEN ENERGY..HOT MONEY..BRIGHT FUTURE!!!

Malini Bhupta  |  Mumbai  

November 28, 2013 Last Updated at 00:45 IST

Foreign investors queue up for road & clean energy assets
This is because not only are valuations attractive, new opportunities have also arisen in sectors such as renewable energyIndia’s infrastructure sector may be burdened by high debt and slowing growth, but this isn’t dampening its attraction for foreign investors. This is because not only are valuations attractive, new opportunities have also arisen in sectors such as renewable energy.Foreign investors, especially long-only funds and large renewable players, are either snapping up assets in this segment or setting up projects in India.Six months ago, this wasn’t the case; promoters weren’t willing to consider an outright sale of their road assets. But with interest costs biting and the rate cycle showing no sign of a turn, infrastructure developers are looking to unlock capital by divesting some of their projects to reduce stress.

FUNDS FLOW

Government of Singapore Investment invested Rs 1,000 crin Greenko, a renewable energy company in Mar 2013 GE Energy Financial Services invested Rs 257 cr in Gati Infrastructure's hydropower plant in Sikkim in July 2013 In October 2013, SBI Macquarie picked 34% stake for Rs 700 cr in a holding company of Ashoka Buildcon, which owns seven road projects SBI Macquarie Infra Fund in February this year acquired 74%in GMR's Farukhnagar-Jadcherla highway in Andhra Pradesh forRs 206 cr Of the 80 operational road projects constructed as public-private partnerships, more than half are looking at raising capital through a part or majority stake sale The government is looking at attracting Rs 90,000 cr in investment through four solar ultra mega power projects

GMR Infra and JP Associates have conveyed to investors they are considering selling road and power assets to unlock capital and lower their respective debts. GMR has already signed two road deals, while JP Power Ventures is in talks with a couple of sovereign funds to sell controlling stakes in its hydro-electric power plants. Of the 80 operational road projects constructed under the public-private partnership (PPP) mode, more than half are considering raising capital through a part or majority stake sale.In the renewable energy space, large foreign investors, be it sovereign funds, pension funds or large companies, are looking at acquiring operating assets that are relatively stress-free, or setting up new projects. Investment bankers say deals to the tune of $2 billion are in the works and will be announced soon.Gaurav Gupta, managing director of Macquarie Capital, an investment bank, says: “As more assets are developed and operational, there will be greater interest from long-only funds. We see greater interest today than a few months ago. The interest is across sectors — renewables, transportation, etc. I think we will see deals worth a couple of billion in the next 12 months.”In the last six months, six large road deals, together worth about Rs 6,000 crore, have been recorded and many more are in the works. Currently, operating road assets are the least stressed, which is why a lot of deals have already happened in this space. SBI Macquarie Infrastructure Fund has invested $300 million in road assets through the last nine months, which makes it one of the largest investors in the sector.There is heightened interest in the roads and renewables sector from foreign investors. A couple of months ago, Government of Singapore Investment Corporation invested Rs 1,000 crore in Greenko, a Hyderabad-based renewable energy company.The company owns and manages renewable energy assets across several Indian states. SunEdison, an American company that owns solar power assets in India, is looking at joint venture partners to set up solar plants in the country. In July this year, GE Energy Financial Services invested Rs 257 crore in Gati Infrastructure’s hydro power plant in Sikkim.Raja Lahiri, partner for transaction advisory services at Grant Thornton, says, “Clean energy is one of the hottest sectors globally and foreign investors are looking at India because the government is in the process of signing a lot of power purchase agreements in the sector.”As the government eyes power purchase agreements and considers giving sops to investors, a spate of deals is in the pipeline. The government plans to draw Rs 90,000 crore in investments through four solar ultra mega power projects. Investment bankers say solar power companies such as First Solar and SunEdison are considering setting up solar power plants in India.Rahul Gupta, director at Rays Power Experts, which operates and develops solar power plants for its customers, says, “We are in talks with some foreign investors and some investment opportunities are expected to open up in the coming months, as the government is expected to sign power purchase agreements in the renewable energy sector. Foreign investors are interested in renewables because the IRR (internal rate of return) works out to 14-15 per cent and even if they hedge for currency risks, the returns are lucrative.”Also, there are no fuel linkage woes in the renewables space. And, the government is fast-tracking clearances before inviting companies to sign power purchase agreements.

http://www.business-standard.com/article/companies/foreign-investors-queue-up-to-acquire-road-clean-energy-assets-113112700804_1.html

OPTICAL FIBRE ROLL OUT....NEXT BIG OPPORTUNITY!!!!

BSNL, PowerGrid & RailTel to get Rs 2,700 crore for optic fibre rollout
By Kalyan Parbat, ET Bureau | 25 Nov, 2013, 04.07AM IST

KOLKATA: The telecom department will shortly move a Cabinet note for payout of Rs 2,700 crore as administrative charges to Bharat Sanchar Nigam, PowerGrid and RailTel, who have been mandated to handle cable laying and trenching responsibilites of the national broadband venture in the 70:15:15 ratio. 
Cable laying and trenching is the most expensive piece of the communications ministry's ambitious Rs 21,000-crore national broadband rollout, popularly known as the national optic fibre ne .. 
Read more at:
http://economictimes.indiatimes.com/articleshow/26334459.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

India emerges most attractive investment destination..!!!!

India emerges most attractive investment destination: Ernst & YoungPTI | New Delhi | Updated: Nov 24 2013, 14:57 ISTSUMMARYIndia as most attractive investment destination followed by Brazil and China.With relaxation in FDI norms to boost investor sentiments, India has emerged as the most attractive investment destination surpassing neighbouring China and the US, says a report.The global survey of leading consultancy firm EY has ranked India as the most attractive investment destination followed by Brazil and China at second and third positions, respectively.While Canada has cornered fourth spot, the US is placed at fifth position. Other nations in the top ten are South Africa (6), Vietnam (7), Myanmar (8), Mexico (9) and Indonesia (10)."With sharp currency depreciation and opening up of FDI in various sectors, India has become an attractive destination for foreign investors," EY, earlier known as Ernst & Young, said.In August, the government announced relaxation in Foreign Direct Investment (FDI) norms in many sectors, including multi-brand retail and telecom.According to the global consultancy firm, due to the present macro-economic pressures and heavy debt pile, several Indian companies are looking to divest non-core businesses."This has created a large opportunity for foreign players vying for a greater role in the Indian market," it added.When it comes to investments, the US, France and Japan have emerged as "top three investors likely to invest in India".The findings are a part of EY's latest Capital Confidence Barometer report, based on a survey of about 1,600 senior executives from large companies across 70 countries. It aims to gauge corporate confidence in the economic outlook and understand boardroom priorities, among others.With respect to India, sectors with the highest level of anticipated deal-making include automotive, technology, life sciences and consumer products.About 38 per cent of the respondents felt that M&A volumes in India are expected to improve over the next 12 months."Indian companies also reflect a concerted focus on job creation as well as optimising operations to deliver cost reduction," the report said.Amit Khandelwal, who is National Leader & Partner (Transaction Advisory Services) at EY, said the investor outlook for India remains positive, despite the challenges the country's economy has faced in the recent past.On the other hand, the report said that Indian corporate entities have started looking at developed markets for making acquisitions."After two years, European countries (UK and Germany) have made a comeback on the potential investment destinations list for Indian companies," it added.

http://www.financialexpress.com/news/india-emerges-most-attractive-investment-destination-ernst-amp-young/1198981/2

SEBI...SUPREME COURT...Sahara story..Rs 20,000 crore!!!!.

But where are the investors?
The Sahara story is much more than one about a company engaged in para-banking activity and violating capital market regulations.
More than a year has passed since the Supreme Court ordered two Sahara Group companies to return to SEBI over Rs 24,000 crore raised through optionally fully convertible debentures (OFCD). The money, to be deposited within three months of the court order on August 31, 2012, was to be refunded to nearly 3 crore investors who had ostensibly subscribed to the OFCDs. The role of the capital markets regulator was to refund investors after ascertaining their genuineness. The deadline is long over and Sahara has coughed up only Rs 5,120 crore so far, even while claiming that most investors had already been refunded.

This and Sahara’s continuing obfuscatory tactics are nothing but an open defiance of the apex court. But the twists and turns in this seemingly interminable courtroom saga raises an obvious question — is this case fundamentally one about investor grievances? Irrespective of what SEBI claims and what the Supreme Court seems to believe, the answer is no. There are good reasons to think there were never 3 crore Sahara investors in the first place. Though SEBI’s website carries a running ticker inviting investors to seek refund, there have been claims from a very small number of subscribers, for sums running into a few lakhs. The fact is that the bulk of the investors simply haven’t come forward; they are phantoms, untraceable despite the magnitude of the scam.

It raises a further question. If these are fictitious investors, who were a part of an elaborate money-laundering scheme, then, is SEBI — which is mandated to protect investors — the right organisation to be fighting this case? Should we be surprised that despite openly seeking out complainants, SEBI has made precious little headway? Wouldn’t it have been far better if the case was treated as a money-laundering one and left from the very beginning to the Enforcement Directorate? The ED, which has recently registered two cases on the issue, will investigate, among other things, whether the missing money has been transferred out of the country and whether a large number of the investors were phantoms — in effect, conduct the kind of probe that SEBI isn’t capable of.
It is time the Sahara case is not treated as principally one in which a company engaged in shadowy para-banking activity and thereby violated capital market regulations. 

The Supreme Court has put pressure on the group by preventing the sale of any of its properties and demanding that it submit original title deeds of land worth Rs 20,000 crore to SEBI. But the full truth of the Sahara story — the one about phantom investors and missing sums of money — is likely to be uncovered only by cases registered under the Prevention of Money Laundering Act (PMLA).
(This article was published on November 22, 2013)

http://www.thehindubusinessline.com/opinion/editorial/but-where-are-the-investors/article5380192.ece?homepage=true

Nifty is headed towards 5,780-5,800...!!!

Nov 22, 2013, 06.08 PM IST Technicals: 

Nifty will slide unless it can break past 6210 

A look at the short-term price chart indicates that the Nifty is tracing out a bearish sequence of lower highs and lower lows. B Krishnakumar, fundsindia.com More about the Expert...Source: Moneycontrol.com

The Nifty has been struggling to get past its life-time high at 6,358. A look at the short-term price chart indicates that the Nifty is tracing out a bearish sequence of lower highs and lower lows.  From the 15-minute chart featured below, it is evident that the index is moving within the confines of the blue set of lines. For 15-minutes chart, Click here The middle blue line is the key reference point and the trend remains bearish until the price moves past this centerline. The real level to contend with is the red balance line at 6,210. 

As long as the Nifty trades below this red line at 6,210, the path of least resistance would be on the way down. As highlighted in the daily chart of the Nifty featured below, the open gap at 5,780-5,800 is the next destination. For daily chart, Click here A break below the recent low of 5,972 would indicate that the Nifty is headed towards this target at 5,780-5,800. Until there is a breakout above 6,210, there would be a strong case for a slide to 5,800. 

Read more at: http://www.moneycontrol.com/news/market-cues/technicals-nifty-will-slide-unless-it-can-break-past-6210_995255.html?utm_source=ref_article

Cairn India to consider share buy-back next week....!!!!

Cairn India to consider share buy-back next week, move to help Vedanta Group
Reuters | New Delhi | Updated: Nov 22 2013, 13:50 ISTSUMMARYSteel billionaire Anil Agarwal-led Vedanta Group holds 58.76 per cent stake in Cairn India.Cairn India Ltd board will on Tuesday consider a proposal to buy back shares, a move which will help promoters Vedanta Group increase its stake in the company without putting any money.
Cairn, which is sitting on a cash pile of about USD 3 billion, in a filing to the stock exchanges said "a meeting of the Board of Directors of the company will be held on November 26, 2013, to consider the proposal for buy back of equity shares of the company."
Share buy back is the process where a company repurchases outstanding shares in order to reduce the number of shares on the market.Companies, as a rule, buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.
As per SEBI rules, Cairn will buy a pre-decided quantity of shares from the market at a rate which is likely to be higher than current trading price. Such shares will be held as treasury stock and eventually extinguished.This will lead to its promoter Vedanta Group's stake in the company going up without putting any money.Steel billionaire Anil Agarwal-led Vedanta Group holds 58.76 per cent stake in Cairn India.
UK's Cairn Energy plc, which had sold majority stake in Cairn India to Vedanta Group, still holds 10.27 per cent shares and may look at the share buy back programme to exit.Vedanta Group had bought stake in Cairn India at Rs 355 per share, a price the company stock has not touched in last one year.
"Cairn Energy is a known seller for long time and the share buy back may present it with an opportunity to exit from Cairn India," an analyst said.While share buy back is considered an efficient means of returning capital to shareholders, it also indicates that the company is not looking at doing major acquisitions or has significant capex plans that may need its current cashpile. Analysts said Vedanta holds 112.27 crore shares out of a total of 191.05 crore outstanding shares of Cairn India.
Cairn UK Holdings Ltd has 19.61 crore shares while Life Insurance Corp (LIC) has 16.77 crore (8.78 per cent) shares.ICICI Prudential hold 1.08 per cent shares while foreign institutional investors (FIIs) have 15.14 per cent holding. Financial institutions and Bank have 8.7 per cent.
Analysts said in case Cairn India buys 10 per cent of 19.10 crore shares in the buy back programme and extinguishes them, the total outstanding shares will come down to 171.945 crore. The reduced outstanding shares would mean that Vedanta Group's stake would rise to about 65.3 per cent without it buying any new shares.
Cairn, which produces over 1,75,000 barrels per day of oil or a quarter of India's crude oil production, was up Rs 9.45 (2.98 per cent) at Rs 326.70 at 1300 hours on the BSE.

http://www.financialexpress.com/news/cairn-india-to-consider-share-buyback-next-week-move-to-help-vedanta-group/1198257/2